- The first sale of Electoral Bonds will commence from 1 March 2018 for a period of ten days.
- As per the Ministry of Finance, State Bank of India has been authorized to issue and encash Electoral Bonds initially at its four authorised branches.
- Electoral Bond will be valid for 15 days from the date of issue and no payment shall be made to any payee Political Party if the Bond is deposited after the expiry of the validity period.
About Electoral Bonds
- The Central Government had notified the Electoral Bond Scheme 2018 through a Gazette Notification on January 2, 2018.
- Electoral Bond would be a bearer instrument in the nature of a Promissory Note and an interest free banking instrument.
- A citizen of India or a body incorporated in India will be eligible to purchase the bond.
- Electoral Bond (s) would be issued/purchased for any value, in multiples of Rs.1,000, Rs.10,000, Rs.1,00,000, Rs.10,00,000 and Rs.1,00,00,000 from the Specified Branches of the State Bank of India (SBI).
- The purchaser would be allowed to buy Electoral Bond(s) only on due fulfilment of all the extant KYC norms and by making payment from a bank account. It will not carry the name of payee.
- Electoral Bonds would have a life of only 15 days during which it can be used for making donation only to the political parties registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the last general election to the House of the People or a Legislative Assembly.
- The Electoral Bonds under the Scheme shall be available for purchase for a period of 10 days each in the months of January, April, July and October, as may be specified by the Central Government. An additional period of 30 days shall be specified by the Central Government in the year of the General election to the House of People.
- The Electoral Bond(s) shall be encashed by an eligible political party only through a designated bank account with the authorised bank
Why needed?
- The conventional system of political funding is to rely on donations. These donations, big or small, come from a range of sources from political workers, sympathisers, small business people and even large industrialists.
- The conventional practice of funding the political system was to take donations in cash and undertake these expenditures in cash.
- The sources are anonymous or pseudonymous. The quantum of money was never disclosed.
- This system ensures unclean money coming from unidentifiable sources. It is a wholly non-transparent system. In this backdrop electoral bond scheme was introduced.
